The First-Time Home Buyer’s “Starter” Guide

According to TREB’s 2017 report, first-time buyers make up 47% of home purchases in the city of Toronto. If you’re one of those motivated first-time buyers who want to find a fantastic home but aren’t sure how or where to begin, here’s a simple guide to help you get started.For a more comprehensive, step-by-step “how-to” guide, please click here.

Best Neighbourhoods to Buy in Toronto

Toronto has approximately 240 official and unofficial neighbourhoods within the city with properties for first-time homebuyers. You can find centrally located downtown condos for less than $600K, and homes for under $800,000 in up-and-coming areas like Dovercourt Wallace Emerson, South Riverdale, Rockcliffe Smythe or Malvern. Emerging neighbourhoods with “affordable” options are still out there, the trick is being prepared to act quickly.

What Type of Home to Buy

According to Genworth Canada’s 2017 survey, with average home prices reaching upwards of $800,000, first-time buyers in Toronto embrace condo living to break into the Toronto real estate market. If you can manage to save and/or get help from family, and your homeownership goals are to buy a house instead of a condo, I often recommend looking for a duplex or triplex with a basement apartment to rent out as an income suite.

Affording a Home in 2018

To get pre-approved for a mortgage, you will meet with a lender who will base your loan amount on your income, credit rating, debt, and down payment amount. In the GTA, first-time buyers pay a median price of $800k for their starter home. They’re usually a couple, with a combined yearly income of $125-150K, and 75% of them use their joint savings to pay for their down payment.

In Toronto, the minimum down payment you can make is 5% for the first $500K and 10% on the remaining amount. Houses that cost more than $1M require a 20% down payment. Keep in mind that you’ll also be paying the land transfer tax, lawyer fees, renovations, and adjustments. Want to know just how much salary you need to purchase a home in Toronto? Check out How to Afford a House in Toronto in 2018.

What You’re Eligible For

First-time buyers in Toronto are eligible for multiple tax rebates, including the Land Transfer Tax Rebate. There’s also the HST New Housing Rebate, which allows new home buyers to receive a rebate of 36% of the HST paid on the home purchase.

As long as you and your partner have never owned a home before, you may also be eligible for the First-Time Home Buyer’s Credit, a government program that provides a 15% income tax credit.

Want to take the first step on the property ladder? I’d love to help. Give me a call at 647-898-4663, or reach me by email at Alex@AlexBeauregard.com and we can get started.

Ready to take the next step?

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